The last question is what I was looking for. I'm deep ITM now on the put side of an iron condor on CRM after hours with the earnings release and just hoping I don't get assigned early.
Hi Jim, first of all, thanks for all the instructive videos. I have a question about rolling in general using short puts as an example: If I sell a short put at the beginning, then my assumption will be that the underlying will move above my chosen strike in the lifetime of the put. But if the put then unexpectedly gets into trouble and for example already runs slightly in the money, why exactly do I roll the put instead of getting assigned? With the rolled put, regardless of whether it has a longer duration and/or a lower strike, I give the trade more time to end successfully. So far so good. But this means in reverse that I assume that the underlying recovers and runs in my originally assumed direction. Under these assumptions, wouldn't it make much more sense to get assigned and participate with a delta of 1 in the recovery I assume? I would be very happy to receive an answer.
If you're really aware of what you're signing up for, I suppose not. But an adjustment like that kind of alters the original intent of the strategy, with having your max loss defined at entry.